Nexteer Automotive Group Limited · HKEX:1316
Nexteer Automotive — H1 2022 Earnings Presentation
32 slides from Nexteer Automotive's earnings presentation, Aug 17, 2022
Slide 1: 2022 Interim Results Announcement
2022 Interim Results Announcement 17 August 2022 Copyright 2022, Nexteer Automotive Corporation. All rights reserved. 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement These materials have been prepared by Nexteer Automotive Group Limited (“Nexteer” or the “Company”) and are being furnished to you solely for informational purposes. The information contained in these materials has not been independently verified. NO REPRESENTATION OR WARRANTY
Slide 3: Agenda
Agenda 2022 1H Business Overview Robin Milavec, Executive Board Director, President, Chief Technology Officer and Chief Strategy Officer 2022 1H Financial Review Mike Bierlein, Senior Vice President and Chief Financial Officer 2022 2H Considerations Mike Bierlein, Senior Vice President and Chief Fin
Slide 4: 2022 1H Business Overview
2022 1H Business Overview ROBIN M I L AV E C Executive Board Director President Chief Technology Officer Chief Strategy Officer 4
Slide 5: Executive Leadership Change
Executive Leadership Change ZILI LEI Chairman of the Board Chief Executive Officer 5
Slide 6: Strategy for Profitable Growth
Strategy for Profitable Growth Expand Strengthen Capitalize on Optimize Cost Pursue Select Target China & Diversify Technology EPS as Enabler Structure Acquisitions & Emerging Revenue Base Leadership for ADAS & Alliances Markets A well-defined plan to drive stakeholder value 6
Slide 7: Vision Statement
“ We are the Leading MOTION CONTROL TECHNOLOGY COMPANY that Accelerates Mobility to be SAFE, GREEN & EXCITING.” nexteer VISION STATEMENT AUTOMOTIVE
Slide 8: 2022 1H Business Overview
2022 1H Business Overview Successfully launched 17 major programs across all regions Achieved $4.4 billion new bookings of 83% represented conquests - Breakthrough wins with first SbW program, an EV truck and leading Chinese NEV OEMs Continued commitment to technology leadership and megatrend alignm
Slide 9: Launched Major Programs in 1H 2022
Launched 17 Major Programs in 1H 2022 NORTH AMERICA EMEASA APAC (1) (2) (14) Ford F-150 Lightning Renault Captur & Dacia Duster Great Wall Kugou Geely Smart #1 Lynk & Co 01 Great Wall Tank 500 REPS Halfshafts CEPS Halfshafts Halfshafts Columns Cadillac Lyriq Chang’An UNI-V Ford Everest Geely Xingyue
Slide 10: 2022 1H Business Overview
2022 1H Business Overview Successfully launched 17 major programs across all regions Achieved $4.4 billion new bookings of 83% represented conquests - Breakthrough wins with first SbW program, an EV truck and leading Chinese NEV OEMs Continued commitment to technology leadership and megatrend alignm
Slide 11: New Business Wins – 1H 2022
New Business Wins – 1H 2022 Bookings Key Highlights Bookings* Composition ($ in billions) ($ in billions) Industry 1st High Volume SbW Program with A 13% 20% Leading, Global OEM; $6.3B 2% 30% $4.4B $4.4B Record-Setting Lifetime $4.4B Revenue Contract 85% EPS 50% N. America Driveline Asia Pac. A
Slide 12: NEV Spotlight in China
NEV Spotlight in China Targeting Mainstream NEV Participants Traditional OEMs NEV OEMs Being electrified… 12
Slide 13: 2022 1H Business Overview
2022 1H Business Overview Successfully launched 17 major programs across all regions Achieved $4.4 billion new bookings of 83% represented conquests - Breakthrough wins with first SbW program, an EV truck and leading Chinese NEV OEMs Continued commitment to technology leadership and megatrend alignm
Slide 14: Megatrends & Opportunities
Megatrends & Opportunities Convergence of megatrends is reinventing our industry Our innovations solve motion control challenges across all megatrends Creates opportunities for our premium products 14
Slide 15: SbW: Center Link Connecting Megatrends & Next Steering Conversion Wave
SbW: Center Link Connecting Megatrends & Next Steering Conversion Wave SbW is the “Center Link” that connects all megatrends. SbW is key in becoming the dominant steering supplier First Business Award Received in March 2022 from a global OEM Automated Steering Actuator (a SbW derivative) is a 2022 P
Slide 16: Software-Defined Vehicle Changes Industry
Software-Defined Vehicle Changes Industry Software becoming a dominant megatrend, and a differentiator in the market; Nexteer’s opportunities in chassis domain functions, vehicle health, road condition sensing, etc. Vehicle Architecture Evolution New System Level Functions and Features CURRENT S
Slide 17: Software Expansion & Industry Recognition
Software Expansion & Industry Recognition Yaw from Braking/ Powertrain Road Surface Detection & Brake-to-Steer Tire Health Management Additional Safety Layer for SbW & Levels 1 – 5 Enhanced Real-Time Connection for Safer Driving 17
Slide 18: eDrive Launch: Q3 2022
eDrive Launch: Q3 2022 Leverages Nexteer’s strengths in electric motors, electronics & software Supports electrification megatrend Launches Q3 2022 with a China OEM 48v Integrated Belt- Driven Starter Generator (iBSG) eDrive CHOOSE NEXTEER eDRIVE FOR… • Greater Fuel Efficiency • Greater Cost E
Slide 19: 2022 1H Business Overview
2022 1H Business Overview Successfully launched 17 major programs across all regions Achieved $4.4 billion new bookings of 83% represented conquests - Breakthrough wins with first SbW program, an EV truck and leading Chinese NEV OEMs Continued commitment to technology leadership and megatrend alignm
Slide 20: Industry Recognition
2022 Automotive News PACE Finalist - Automated Steering Actuator Industry 2022 Automotive News PACEpilot Finalist - Road Surface Detection & Intuitive Warning Software with Tactile Mobility Recognition 2022 Frost & Sullivan’s N.A. Market Leadership Award GM Supplier of the Year Award - Third Consecu
Slide 21: 2022 H1 Financial Review
2022 H1 Financial Review MIKE BIERLEIN Senior Vice President Chief Financial Officer 21
Slide 22: 1H 2022 Financial Observations
1H 2022 Financial Observations Continued Challenging Industry Environment Adjusted Revenue Growth Outpaced Market by 490 basis points Supply Chain Constraints and Macro Factors Impacted OEM Production 1H 2022 OEM production decreased by (1.8%) compared with 1H 2021 COVID related lockdowns in Chi
Slide 23: 1H 2022 Key Financial Metrics
1H 2022 Key Financial Metrics ($ in millions) Revenue EBITDA Net Profit* Free Cash Flow +3.3% -25.7% -113.4% $1,791 $83 $46 $213 $1,734 $1,624 12.3% 4.8% $158 $148 $38** $35 8.8% 9.1% 2.2% ($7) 2.1% +10.3% +6.9% -0.6% ($44) ($11) 1H 2021 2H 2021 1H 2022 1H 2021 2H 2021 1H 2022 1H 2021 2H 2021 1H 202
Slide 24: Revenue Bridge – 1H 2022 vs 1H 2021
Revenue Bridge – 1H 2022 vs 1H 2021 ($ in millions) Total Revenue Y-O-Y Revenue Drivers +3.3% $1,791 $1,734 $57 1H 2021 1H 2022 24
Slide 25: Revenue Growth vs. Market
Revenue Growth vs. Market ($ in millions) Adjusted Revenue* * Adjusted revenue excluding foreign exchange As Reported by IHS Markit – July 2022 and commodity recovery (units in millions) 1H 1H Unit % Vs. 1H 2021 Outpaced Market 490 bps 2021 2022 Change Change +3.1% North America 6.8 7.1 0.3 4.4% Mem
Slide 26: 1H 2022 Preliminary Financial Results
1H 2022 Preliminary Financial Results ($ in millions) Revenue by Region Total Revenue Regional Distribution (structural %) (growth %) NA APAC EMEASA $1,734 $1,791 18% 18% +$54 $1,095 $388 +$3 -$13 $1,023 +$18 $378 21% $317 -$16 22% +$15 $316 +7.0% -2.5% -0.3% 61% 59% Excl. Excl. Excl. Commodity Impa
Slide 27: EBITDA Bridge – 1H 2022 vs 1H 2021
EBITDA Bridge – 1H 2022 vs 1H 2021 ($ in millions) EBITDA Y-o-Y EBITDA Drivers (% of revenue) -25.7% $213 $158 -$55 12.3% 8.8% 1H 2021 1H 2022 Earnings Tempered by Inflation / Cost Pressures / Supply Chain Constraints / Logistics 27
Slide 28: EBITDA by Region
EBITDA by Region ($ in millions) NA APAC EMEASA (% of revenue) (% of revenue) (% of revenue) 11.5% 20.9% 8.4% 18.1% 6.9% 7.2% $118 $79 $81 $68 $22 $27 1H 2021 1H 2022 1H 2021 1H 2022 1H 2021 1H 2022 Margins Reduced Due to Solid Margin Profile Improving Margin Commodity Costs and Other Despite Impact
Slide 29: EBITDA to Net Profit Bridge
EBITDA to Net Profit Bridge ($ in millions) 1H 2021 1H 2022 JV Earnings comprised of EBITDA $ 213 $ 158 CNXMotion, DF and Chongqing operations - D&A Expense 119 136 1H 2022 includes $49M non- Operating Profit $ 94 $ 22 cash unrecognized tax benefit + Share of JV Earnings - (2) related to US defe
Slide 30: 1H 2022 Free Cash Flow / Balance Sheet
1H 2022 Free Cash Flow / Balance Sheet ($ in millions) Dec 2021 Jun 2022 Cash and Capital 1H 2021 1H 2022 Gross Debt $ 84 $ 107 Finance Leases 62 58 Less: Cash 327 317 Net Debt / (Cash) $ (180) $ (153) ($139) Total Equity $ 2,003 $ 1,925 $95 $122 ($129) Total Net Capital $ 1,823 $ 1,772 Net Debt / N
Slide 31: 2H 2022 Considerations
2H 2022 Considerations Light Vehicle Production Forecast OEM Production Volume Expected to (Units in millions) Increase Significantly in 2H 2022 2H 1H 2H 2H 2022 2022 H/H % 2022 2021 Y/Y % ‒ IHS forecasts 9% increase 2H 2022 compared Global 42.1 38.7 9% 42.1 37.8 11% to 1H 2022 NA 7.6 7.1 6% 7.6 6.3
Slide 32: Strategy for Profitable Growth
Strategy for Profitable Growth Expand Strengthen Capitalize on Optimize Cost Pursue Select Target China & Diversify Technology EPS as Enabler Structure Acquisitions & Emerging Revenue Base Leadership for ADAS & Alliances Markets A well-defined plan to drive stakeholder value 32
Nexteer Automotive Group — H1 2022 Earnings Presentation on 6ix